“As a result of the Great Resignation, it’s not that people aren’t working, it’s just that many people are starting to work for themselves,” she said. Especially now that the labor force has shifted. The IRS wants to collect on that, said Caroline Bruckner, managing director of the Kogod Tax Policy Center at American University. However, cash - and now apps - make it easier for people to illegally underreport their earnings. “The old days of taking $20 and putting it in your pocket are long gone,” he said. About half his clients use digital payment platforms in lieu of checks, credit cards or cash. Now, the platform is used by “hairdressers, dog walkers, financial consultants,” said Jonathan Medows, a CPA for independent contractors in New York City. When Venmo started, it was mostly used to split bills for things like dinner or utilities among friends and family.
So what does this change mean for businesses? Starting in 2022, mobile payment apps like Venmo, PayPal, Cash App and Zelle are required to report business transactions totaling more than $600 per year to the IRS.īefore, the threshold was much higher - $20,000 - and you had to make a certain number of transactions.
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